8 Apr 2014
BOJ further easing still expected in July at the earliest - Nomura
FXStreet (Bali) - According to Shuichi Obata and Tomo Kinoshita, Economists at Nomura, while there are almost no prospect of additional monetary easing by the BoJ on April 30 meeting, additional easing is still expected in July.
Key Quotes
"BOJ governor’s post-meeting press conference: confident about achieving price stability target.The BOJ retained its basic economic assessment, confining itself to minor revisions to factor in the consumption tax hike. BOJ Governor Haruhiko Kuroda once again made confident comments about achieving the price stability target at the post-meeting press conference, and as we had expected he gave no hints about additional monetary easing. We particularly note his view that the supply-demand gap on the labor market has narrowed to almost zero thanks to a greater-than-expected improvement in hiring."
"The BOJ is scheduled to host a policy board meeting and publish its Outlook for Economic Activity and Prices Report (Outlook Report) on 30 April. Although we think it could well lower its median FY14 real GDP growth forecast from +1.4% y-y as of January 2014, based on what Governor Kuroda had to say, we see little risk that it will change its view that it could achieve its price stability target of 2.0% from end-FY14 through FY15. We now see almost no prospect of the BOJ implementing additional monetary easing at the 30 April policy board meeting."
"We still expect the BOJ to engage in additional monetary easing in July at the earliest. As stated above, it is difficult to take away any hints of additional monetary easing from Governor Kuroda’s post-meeting press conference. We regard the BOJ’s price outlook as bullish, and think it could well be subject to downward revisions. We think it will take at least until the July policy board meeting for the BOJ to have enough data on the economy and prices in the wake of the consumption tax to be able to revise its outlook."
Key Quotes
"BOJ governor’s post-meeting press conference: confident about achieving price stability target.The BOJ retained its basic economic assessment, confining itself to minor revisions to factor in the consumption tax hike. BOJ Governor Haruhiko Kuroda once again made confident comments about achieving the price stability target at the post-meeting press conference, and as we had expected he gave no hints about additional monetary easing. We particularly note his view that the supply-demand gap on the labor market has narrowed to almost zero thanks to a greater-than-expected improvement in hiring."
"The BOJ is scheduled to host a policy board meeting and publish its Outlook for Economic Activity and Prices Report (Outlook Report) on 30 April. Although we think it could well lower its median FY14 real GDP growth forecast from +1.4% y-y as of January 2014, based on what Governor Kuroda had to say, we see little risk that it will change its view that it could achieve its price stability target of 2.0% from end-FY14 through FY15. We now see almost no prospect of the BOJ implementing additional monetary easing at the 30 April policy board meeting."
"We still expect the BOJ to engage in additional monetary easing in July at the earliest. As stated above, it is difficult to take away any hints of additional monetary easing from Governor Kuroda’s post-meeting press conference. We regard the BOJ’s price outlook as bullish, and think it could well be subject to downward revisions. We think it will take at least until the July policy board meeting for the BOJ to have enough data on the economy and prices in the wake of the consumption tax to be able to revise its outlook."